401k loan for down payment?

[Hemlawk]

A friend of mine insist that I'd be ok or better off borrowing from my 401k. Ive only had my 401k for maybe 16 months so its at about $10k. Apparently I an borrow 50% interest free.
Im saving for a dp, I should have about $6k this time next year. Id also use my bonus from work + tax refund. So I should have approx $10k. I want my monthy payments under $500.
Would it be wise to borrow from my 401k to increase my dp to lower my monthly payment?

I was going to get an LT but after driving a SS, I can't settle for anything less.

[coolman]

NEVER,NEVER,NEVER,NEVER, BORROW AGAINST YOUR 401K!

[Dr Jkel]

Don't do it. Just keep saving you will lose in the end if you take out of your 401K

[DocHolliday]

Borrow against and appreciating asset to pay for a depreciating asset? Not the best idea bro.

[Hemlawk]

Ya I know it's not smart. I won't do it. I just want my Camaro so bad. Haha
maybe I'll sell my Exelon stock... Or not

[Blade]

Man..........you will need that money when you are old as dirt and not have social security.

DO NOT BORROW AGAINST 401K!!!

[nova]

After you've done that, go and get a cash out home equity loan to pay the rest. That way you can completely screw up your financial future all in one fell swoop....

[Hemlawk]

Originally Posted by nova

After you've done that, go and get a cash out home equity loan to pay the rest. That way you can completely screw up your financial future all in one fell swoop....

I don't have enough equity yet to pay for a Camaro! Ahhhh hahah I wouldn't do that. I just feel desprite for my dream car.

[dbotsfordtat]

I say spend it before the sharks on Wall Street find a way to steal whats left or inflation completely destroys its value. I know thats not a popular viewpoint but without reform, and there has been zero reform, you are a mark for the insiders.

I would enjoy it while I could or maybe find a different investment, perhaps Real Estate. If you want to see our generations retirement options, look no further than Mexico or China. The current generation of retirees is probably America's last unless something big changes.

The U.S. dollar is certainly in the process of depreciating and will probably get much worse in the near future and again, the market is rigged and currently experiencing the creation of another b.s. bubble IMO.

[Scrappy Doo]

Absolutely do not borrow against it.

[JMM1181]

Originally Posted by dbotsfordtat

I say spend it before the sharks on Wall Street find a way to steal whats left or inflation completely destroys its value. I know thats not a popular viewpoint but without reform, and there has been zero reform, you are a mark for the insiders.

I would enjoy it while I could or maybe find a different investment, perhaps Real Estate. If you want to see our generations retirement options, look no further than Mexico or China. The current generation of retirees is probably America's last unless something big changes.

The U.S. dollar is certainly in the process of depreciating and will probably get much worse in the near future and again, the market is rigged and currently experiencing the creation of another b.s. bubble IMO.

I hate to say it, but as gloomy as this sounds, it is also likely the most accurate. Recently I've decreased my 401k contribution amounts, not for any other reason that having money tied into fluctuating, and at times volatile, markets is playing Russian roulette. People can call me a conspiracy nut or say whatever you'd like, but the truth is the market seems erratic and chaotic but it's also very predictable to those who own the 'game,' and the one card they could pull at any moment to crash all of us is the 401k card.

Think about it, why do all our future funds have to be so closely tied in with the market in the first place? Because it's plausible deniability and gives a back door option so that if/when the market crashes and you're left with nothing, and you can only blame yourself. And how do I know that 'they' (the Powers that Be) own the game so to speak? Because they've been doing so since at least 1815 when the Rothschilds took over Europe after the battle of Waterloo by creating a fake crash and buying up the market. The strategy has not strayed so far, only the tactics involved.

All that said, I still think it's a bad idea to borrow against for a car, but ultimately it's up to decide- since I can't judge you as I've borrowed against mine to pay off a large college loan.

[67 Convertible]

Don't do it!!
Don't you have to prove some kind of hardship to borrow against it anyway?? (Like you're about to lose your house or something like that)

[Darth_Emma]

Never borrow against your retirement savings! It will cost you a LOT more in the long run. DON'T DO IT!

[jleinaweaver]

Originally Posted by Hemlawk

A friend of mine insist that I'd be ok or better off borrowing from my 401k. Ive only had my 401k for maybe 16 months so its at about $10k. Apparently I an borrow 50% interest free.
Im saving for a dp, I should have about $6k this time next year. Id also use my bonus from work + tax refund. So I should have approx $10k. I want my monthy payments under $500.
Would it be wise to borrow from my 401k to increase my dp to lower my monthly payment?

I was going to get an LT but after driving a SS, I can't settle for anything less.

(borrowing this from a friend of mine, some wisdom)

401K Loans
Before we get started, let's talk about 401K loans. You take out a loan and you pay yourself back, say 9%. Wow, you're paying yourself, minus a small 1-time origination fee. Score! right?

It's not that simple. Remember that you're paying yourself back with AFTER-TAX money. When you withdraw the loaned amount during retirement, you'll have paid taxes on the amount TWICE (once at your current tax rate, and once at your retirement tax rate). Factor that in before deciding that "paying yourself instead of the bank" is a good idea. You'll almost always find that paying the bank will be a better option than taking a 401K loan.